Analysis: 86 Percent of Idaho Jobs Pay $7.25 an Hour or More
Idaho Govenment Website
Over 86 percent of Idaho’s jobs pay more than the $7.25-an-hour minimum wage under consideration in Congress, a new analysis by Idaho Commerce & Labor researchers shows.
The study, conducted at the request of state Rep. Shirley Ringo of Moscow, found that two of every 15 jobs in the state last year paid between the current minimum wage of $5.15 an hour and the $7.25 rate proposed in the federal legislation that has stalled in a dispute over an attached provision cutting the federal estate tax.
The analysis by Research Analyst Supervisor Salvador Vazquez updates work he and other researchers did on the minimum wage a year ago, using 2005 information to estimate the economic impact in Idaho of increases the minimum wage to various levels.
The new analysis does not draw any conclusions or make any recommendations about revising the state’s minimum wage. It only estimates the number of Idaho jobs in 2005 paying within the designated wage ranges and the costs to Idaho employers if the wages for these jobs were increased to a higher level. The employer cost estimate also assumes that no jobs are being compensated at less than the legally mandated minimum of $5.15 an hour.
The cost to employers of bringing all 80,100 jobs paying less than $7.25 an hour up to that level was estimated at $142.5 million in 2005. That is just three-quarters of 1 percent of the 2005 statewide payroll of $19 billion.
The cost estimate does not include the effect of higher social security, pension, unemployment insurance and other fringe benefit contributions employers must make on higher wage rates or the payroll impact of avoiding wage compression for jobs that had been paying just above the higher minimum wage rate.
There was also no attempt to gauge the effect a higher minimum wage would have on job creation or retention.
A change in the federal minimum wage would affect the vast majority of jobs in Idaho, but there is a comparatively small proportion of Idaho jobs covered only by the state minimum wage. Should the federal minimum wage be increased, those jobs would continue to be governed by the state minimum wage until the state Legislature chooses to change it.
The minimum wage analysis a year ago focused only on a proposal being circulated at the time to raise Idaho’s minimum wage one dollar to $6.15 an hour. Based on 2004 information, the analysis determined that 32,100 jobs paid less than $6.15 an hour, and the cost to employers to raise the pay for those jobs to $6.15 would be $24.1 million.
The updated analysis found the number of Idaho jobs paying between $5.15 and $6.15 an hour in 2005 had increased by 2,675 to nearly 34,800 but remained essentially at the same proportion of all jobs at about 5.8 percent.
The analysis assessed the impact in 2005 of increasing the hourly minimum wage to $6.15, $6.50, $6.75, $7.00 and $7.25.
Pay
Rate Number of Jobs Cumulative Jobs Cumulative % of
Total Jobs Cost Increase
Per Hour Annual Cost
Increase (in millions)
Under $6.15 34,775 34,775 5.8% $14,605.5 $26.7
Under $6.50 14,517 49,292 8.3% $29,389.8 $53.8
Under $6.75 10,368 59,660 10.0% $43,008.8 $78.7
Under $7.00 10,016 69,676 11.7% $59,175.8 $108.3
Under $7.25 10,404 80,080 13.4% $77,895.3 $142.5
$7.25 or higher 516,920 86.6%
Total Jobs 597,000
Raising the minimum wage to $6.15 an hour would mean an average pay increase of 42 cents an hour, or 6.8 percent, for those 34,800 jobs.
Additionally:
• Raising the minimum wage from $5.15 to $6.50 would affect an additional 14,500 jobs at a cost a total of $53.8 million to bring all jobs under $6.50 to that level.
• Raising the minimum wage up to $6.75 would bring in another 10,400 jobs and increase the total cost to $78.7 million to bring all jobs to that level.
• Raising the minimum wage to $7 would benefit an additional 10,000 jobs and boost the total cost of bringing all 70,000 jobs paying less than that up to $7.
• And raising the minimum wage to $7.25 per hour would affect another 10,400 workers, bringing the cost of raising all 80,100 jobs to $7.25 an hour to $142.5 million.
According to the Bureau of Labor Statistics, nationally people earning the minimum wage are between 16 and 19 years of age and more likely to be unmarried. Four percent of the female population and 2 percent of all men make a minimum wage of $5.15 per hour. The jobs they hold are more likely to be part-time than full-time. About 60 percent work in leisure and hospitality, primarily in food services and drinking establishments.
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